Etailers, Are You Ready? New MasterCard and Discover Rules Coming

As of May 1, 2010, MasterCard and Discover have released new rules that impact the way merchants who accept those cards must handle certain aspects of PrePaid Credit or Debit Cards as well as regular bank Debit Check cards.

Going forward there are three critical issues you must be aware of as a merchant:

1. If someone uses a PrePaid Credit or Debit Card, when you give them the receipt for their transaction you must display the remaining balance available on that PrePaid card.

2. If someone uses a PrePaid Credit or Debit Card or a regular bank issued Debit Check Card and there’s not enough available on the card to complete the entire transaction, you must accept split payments and allow them to pay the remaining balance with another card.

For example, suppose someone is checking out of your online store and their order costs $50 total. When they go to checkout, if their PrePaid or Check Debit Card only has $30 available on it, the system will authorize the $30 and then give them an opportunity to add another card during checkout to pay the remaining $20 balance.

3. If your customer chooses to cancel the order in the case of #2 above, then your gateway must be able to immediately release the hold placed on the initial Authorization created for the PrePaid or Check Cards.

So what does all this mean to you, the online merchant?

Well for now it doesn’t mean a whole bunch for your average small- and medium-sized online merchant.

The first step to make the above even possible in the world of SMB Ecommerce is for the common gateways we all use (like Authorize.net) to implement the tools needed to support these mandates.

Second your shopping cart vendor will need to add support for these features specifically to your gateway; finally, you’ll need to implement these changes in your online store.

For now all you need to do is be aware of what’s coming and pay attention to future announcements from your shopping cart provider and, more importantly, your merchant account and payment gateway provider. As of now, Authorize.net has gotten an extension from MasterCard and Discover and these mandates are not required for Authorize.net customers until June 30, 2011 (14 months from now).

If you have questions, you should check with your payment gateway provider as the mandates and dates for compliance will vary by gateway.

Guest post by Rick Wilson of Miva Merchant. Miva Merchant is an IMA Diamond member.

Ecommerce Merchants: So You’re Thinking About Drop Shipping?

One of the most common questions I hear from new online sellers, or those considering online selling, is, “Should I use a drop shipper?”

Most experienced ecommerce merchants will immediately say, “No!” Others will say “It depends…”

Depends on what?

Really, it does depend – on what you mean by “drop shipper.”  Wikipedia defines drop shipping as: “Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.”

Hey, if you have a manufacturer that is dependable, willing, and has the processes in place to drop ship for you, then you’re on the right track.

But if you are thinking about paying money and signing up for a “drop shipping service” than you’re on the wrong track.

This post is going to concentrate on the latter, because that is what most people are referring to when they ask the question, “Should I use a drop shipper?”

There are many pitfalls to using a drop shipper, especially one that advertises heavily and requires a fee to subscribe to their service. For instance:

You think you’re the only online seller who’s heard of this company? Of course not.

More than likely whichever online marketplace you are considering selling on is flooded with products from this heavily advertised drop shipper.  Because these drop shipper’s items are everywhere, it forces the prices down and you will be lucky to make any profit at all.

You have no control over how your customers’ orders are shipped, or how quickly they are shipped.

This can adversely affect your feedback on whichever marketplace you are selling. Even if you choose to only sell on your own website, slow shipping, and poor packaging, can ruin your reputation and lose you customers.

Out of stock items.

There is nothing that makes a customer angrier than ordering an item and receiving an email a few days later that their item is out of stock.  You have no control over your stock when using a drop shipper. Something that is in stock on Monday may very well be out of stock on Saturday when your customer purchases it from you. This is the quickest way to earn negative feedback on both Amazon and eBay.

If you’re considering selling on either Amazon or eBay, negative feedback can quickly ruin your business, so you want to have as much control over your customer service and merchandise as possible.

The best way to do this is to stock your own products. There’s nothing wrong with starting small, testing the market on a few products, and building from there. That is how most successful ecommerce merchants started.

Once you get a feel for your market, and have established suppliers, you may find a supplier or manufacturer who is willing to drop ship for you.

That is the type of drop shipping to consider, if you consider it at all.

Image: Louis Vest, Creative Commons

Guest post by Cynthia Lizana, immediate past president of the IMA. Cynthia is the President of TexCynGoods, Inc., which specializes in selling women’s wallets, handbags and related items online.

3 Steps To Creating Your Social Media Strategy

Editor’s note: This is a guest post from Shashi Bellamkonda of Network Solutions, who will be speaking at the 2010 IMA Conference next month. If you haven’t already, sign up here.

Whether it is jungle drums or smoke signals, humans have always improvised methods of communications and connections to each other. Village gatherings formed early social circles and networks. Communications have always been evolving – messengers carrying messages on horseback to the pony express to railroads to today’s USPS, UPS and Fed Ex all satisfy the need of communications.

Have you noticed some of these communications means have survived?  Even though we do not use the telegraph, we use the Internet to communicate with short messages today called microblogging.

For a business it is both a challenge and a necessity to find new ways to increase the efficiency of your business.

In the past businesses could make the changes and expect the customers to adapt. In the new millennium, media is now more often in the hands of the users and businesses are beginning to adapt. The Internet, websites and social networks are now replacing village gatherings and spanning users across the globe communing together to discuss common interests, discuss products and companies.

The speed at which conversation spreads has changed the pattern of how movie reviews worked. In an August 2009 article Michael Sragow wrote in the Washington Post, “Although word of mouth could always make or break a movie, it usually took days to affect the box office. But the rise of social networking tools such as Twitter might be narrowing that time frame to hours. And that has Hollywood on edge.”

As a business owner wouldn’t you like to know what your customers are talking about when it comes to your products and your business? These new media tools also give business the same power to learn feedback almost instantaneously.

The 3-step process you could use to shape your strategy is:
1. Listen
2. Engage
3. Create

Listen

Think of the listening phase as an extension of your existing communication and feedback mechanism. The main difference is that feedback through email, phone calls, web forms and maybe even snail mail is mainly directly to you – social networks offer an opportunity to listen in on to public conversations about you. Here’s what you do:
1. Set up Google Alerts
2. Search for your brand /product or your company or your geographical area on http://search.twitter.com
3. Use a tool like Backtype to monitor comment conversations on blog posts.

Engage

In the listening phase, you have identified where the conversations relating to your business are taking place. Now, you can participate by showcasing your knowledge and thought leadership or even asking for feedback:
1. Setup profiles in at least 3 social networks which you have identified as helpful for your business (Facebook, Linkedin and Twitter could be the three)
2. Identify 3 blogs on your particular field or industry to follow. Comment when you have a opinion. In case you are mentioned in any blog post head over the blog and thank the author
3. Look at the questions on networks like Linkedin to add your expertise

Create

This is the phase where you will have learned enough about the conversations about your business and your products to be able to begin creating valuable content that is not about you but your customers and the community:
1. Make sure you have a website. You can get one for free at Network Solutions
2. Start a Facebook Page and encourage your customers to become fans of your page. Create special offers for your Facebook Fans
3. Reinforce your web presence with a blog. Make the blog personal along with writing useful tips for your customers. It does not always have to be about your products., Invite your customers to tell their stories.

You should measure the success of your efforts in terms of increased brand mentions, foot traffic or online traffic, increase in customer satisfaction or higher product awareness leading to higher customer uptake.

Remember all these tools are making human connections so you should show the personality behind your business. And make sure you remember your goals for engaging in social media for your business, since these tools can also be distracting if not used diligently.

When I speak at conferences the best reward is the communication or Twitter messages I get from the audience, sometimes even after a year, with some good news about using social tools for great success. I am hoping the same thing will happen when I speak more on the topic at the IMA conference in March. If there are some topics you would like to hear about specifically please let me know.

Recommended reading:

  • Israel, Shel, Twitterville: How Businesses Can Thrive in the New Global Neighborhoods. Portfolio Hardcover (September 3, 2009)
  • Scott, David Meerman, The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and Online Media to Reach Buyers Directly. WILEY, (June 4, 2007)
  • Campbell, Anita Online publication for small business owners,entrepreneurs: http://smallbiztrends.com
  • Small Business Success Index: http://www.growsmartbusiness.com
  • Women Grow Business: http://www.womengrowbusiness.com
  • Social Media news and Web tips: http://mashable.com/
  • Shashi Bellamkonda is Director – Social Media & Social Media Swami of Network Solutions, a company that works together to help small business succeed online with web hosting, do-it-yourself website builder software, online marketing tools and domain names. Visit his blog here. Shashi is a regular contributor to the DC Examiner and Tech Cocktail. This article contains the opinions and observations of the author and may not necessarily reflect those of Network Solutions or its clients or partners. Connect with Shashi on Twitter, LinkedIn, Facebook or BizSugar.

    Image: Terry Hart, Creative Commons

    3 Ways To Use Your Email Signature to Market Yourself

    Remember how, in the “old” days, folks would “call on” others and, if they weren’t at home, they’d leave their calling card behind? I haven’t been able to find an academic reference to it, but it makes sense that the modern-day practice of exchanging business cards stems from there. And even in this highly electronic day and age, there’s still room for business cards, as I’m sure you’ll agree.

    But are you maximizing the use of your most basic calling card? And that’s nothing more than your email signature.

    We all suffer from email overload – I’ve long since stopped counting how many emails I get in a day. Even when I’m not working or on vacation, I use my BlackBerry to delete unnecessary emails from my inbox, in an effort to keep on top of the traffic (sigh, it never stops!).

    But I also know that when I send an email out, it’s a unique way to remind others of what I do, particular affiliations I have and things that are important to me.

    Here are three tips to maximize your email signature as a marketing tool:

    1. Proclaim yourself.

    You normally include your contact information in your e-signature, right? Why not include hyperlinks to all the relevant data you think people should have access to? For example, these could be your website, blog or Twitter handle. How about your Etsy site or another storefront? If it’s in your signature, it’s right there for the recipients to click through to, yet you’re not hitting them over the head with it.

    2. Add a visual touch.

    Go one step further and add some visual pizazz to your e-signature; and a terrific way of doing this is by using a program such as WiseStamp. What’s cool about this is that you can actually embed the hyperlinks rather than simply include them, and you can also include select social profiles such as Twitter, SlideShare, etc. at the bottom of your signature. Here’s a screenshot from their site:


    3. Put a shortening service to work for you.

    Working on a special promotion? Use a URL-shortening service such as tr.im, bit.ly, ow.ly (or several others) to draw attention to it just above your signature block. For example, I used this as a way to raise funds around my birthday: “Why I’d like you to know how old I am: http://tr.im/K6Yi.”

    Granted, it’s not often that a woman is proclaiming her age for all and sundry to hear, but if you use short but sweet copy and a dedicated URL, it’s an easy way to add to your marketing mix with almost no effort.

    What other ways do you use your e-signature “real estate” to market yourself? Please share by leaving a comment below.

    Image: Rich Bowen, Creative Commons

    IMA Member Spotlight: The Gentle Bath & Company

    Brenda Collins owns The Gentle Bath & Company, and is a textbook case study in branding and marketing an e-commerce business. We sat down and talked with her.

    How and why did you start selling online?

    Before launching my business, I was an RN. I suffered an injury which forced me to “retire” from nursing, so to amuse myself, I sold items from around my house on eBay. That, coupled with the computer and marketing skills I’d learned in Hospital Education, and the design skills I developed through scrap booking when my son was born, set the stage for my launching an e-business.

    Initially I opened an eBay store in the Bath/Spa category in March 2007 – and began to sell items within an hour! I chose that segment because I had a very hard time finding quality items when redecorating my own master bath. I ordered a set of Bamboo Blend bath towels on a whim; I ended up loving them so much they became the foundation of my store. I started out with less than 20 items, gradually adding to them (now I carry around 250 items). After the first year, which was full of growing pains, I launched my own website, and sales soon surpassed those of my eBay store. I closed the eBay store in 2009 at the end of last year and am concentrating on my own website now.

    Tell us about your company.

    The Gentle Bath & Company offers luxury bath items at affordable prices. Our tagline, “Transform your bath into an oasis”,  says it all. We carry a variety of bath-related items from luxury towels to bath caddies to Lady Primrose Bath and Body. We aim to provide our customer with an exceptional internet buying experience.

    What were some of your biggest mistakes? How did you overcome them?

    I’ve had some white elephant products in my inventory; it’s been hard to pinpoint exactly why they don’t sell. I’ve found that sticking with more “known” brands helps with search and sales. I have a clearance category and put some of the items in that, which I’ve been able to return other items to the manufacturere even though I had to pay a restocking fee.

    What do you know now that you wish you’d known when first starting your business?

    Where do I begin?! Probably the biggest thing would be building a website sooner than I did. Starting a store on eBay is a great way to begin with a limited investment, but now there are so many quick and easy website options that I think I could have opened a website sooner than I did.

    Another would be how much time a good shipping program can save you. When I implemented my shipping system (Shipworks) with a dedicated thermal label printer, I cut my package processing time by 200% or MORE!

    “It is vital when choosing your shopping cart that you investigate the shipping processes available for the cart.”

    What three things would you tell aspiring entrepreneurs?

    a. Research research research – your products, your choice of carts and your choice of payments, everything about your business should be researched and then chosen based on what is the best fit.

    b. Always try to exceed your customers’ expectations; they will remember you for it and refer their friends and family to you if they trust you will treat them right.

    c. Join groups such as IMA and the Internet Retailer Association. You can learn so much from others who’ve been there longer than you, and get feedback and information about many cutting-edge practices in the field of Internet sales.

    What has been your greatest business success?

    I think the “branding” and “packaging” that I’ve built is what I am known for.  In addition to my products it is my packaging that stands out from many other Internet companies.  I have often talked to customers about their orders, and apart from my products it’s the packaging that they remember and is what stands out when they think about their order.  It is this attention to detail that often leads a customer to refer their friends and family to my store.

    What are your goals for your company?

    My goals are always changing as my business evolves.  My long-term goal for my company is to maintain profitability as I focus on my website for my sole source of income.  My short-term goals for 2010 are to:

    • change my merchant account from PayPal to one that is more economical,
    • choose and implement an email marketing  program, and
    • take advantage of my new WordPress blog theme and implement all the Google advertising opportunities that are built into the themes framework.

    What are some of your favorite business resources?

    1. IMA – they have so much to offer on their website in addition to one of the most helpful member forums available for the Internet retailer.

    2. Facebook Fan Pages – one of the best free advertising you can get for your business.  I also think their paid ads have some of the best returns for the money.  You can build your fan base and then have a captive audience to communicate with directly regarding all facets of your business. In fact, I find the Facebook interface to be one of the most powerful and easiest to use of all the social networks out there.

    3. SCORE – Service Corps of Retired Executives will provide a small business counselor free of charge.  I have met with mine a few times and that’s been very helpful for me.  Their website is also loaded with resources for the small business owner.

    Finally: why did you join IMA and has it been worth it?

    YES YES YES!!  I was looking for a group that both understood eBay but also focused on business outside of eBay. I found all of that and more in the IMA.  In fact, the member forum is the most helpful forum that I  belong to.  They’ve also started offering more education and that has been very helpful as well.  For the small internet business owner there is no better group to belong to than the IMA!

    Brenda, thanks so much for taking the time to chat with us. Best wishes in 2010 and beyond for The Gentle Bath & Company!

    Edited by Shonali